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A broader look at today’s business n
Sunday, May 15, 2022 Vol. 17 No. 219
P25.00 nationwide | 2 sections 16 pages | 7 DAYS A WEEK
AGARWOOD chips. PHOTO COURTESY OF IBA BOTANICALS INC.
THE TREE OF FORTUNE
Issuance of a government permit paves the way for cultivation, propagation of ‘wood of the gods’ in Philippines
D
By Jonathan L. Mayuga
O it right and a P12.5-million investment in agarwood production today, through the establishment of a one-hectare Aquilaria tree farm, can potentially yield as much as P500 million after 10 years, says Australian businessman Benjamin Mead, founder and CEO of Iba Botanicals Inc.
Along with his business partner, former Department of Agriculture Secretary Luis “Cito” Lorenzo Jr., Mead was first to invest in agarwood production in the Philippines. Iba Botanicals, which is based in Zambales, has started selling imported agarwood seedlings. In five to six years, the company is expected to sell its own seedlings to prospective buyers.
Huge demand, big opportunity
“USING even the most conservative projection, it is an extremely profitable opportunity. What I want to do is encourage the people to plant because we want to grow the industry and we can see very strong demand for Philippine agarwood,” Mead added. Agarwood-importing foreign markets include Middle Eastern countries, China, India and Japan. The tree by-product is also used for perfumes, and countries in Europe are expected to source their raw materials in the Philippines, given that the country’s agarwood is the most sought-after among agarwood products even in the black market. Estimated to be worth $8 billion a year on a global scale, the birth of the agarwood industry in the Philippines essentially began only last year when the Department of Environment and Natural Resources (DENR), through the Biodiversity Management Bureau (BMB), granted the firstever Wildlife Culture Permit to Iba Botanicals. It has also secured the necessary import permits and went through a rigid process to secure
AGARWOOD-PRODUCING Aquilaria malaccensis seedlings at a tree nursery. PHOTO COURTESY OF CENRO MASINLOC
Native tree species
MEAD: “Using even the most conservative projection, it is an extremely profitable opportunity. What I want to do is encourage the people to plant because we want to grow the industry and we can see very strong demand for Philippine agarwood.”
its permit from the Bureau of Plant Industry under the Department of Agriculture. The firm produces essential oils and is a pioneer in the business of producing essential oils from ylang-ylang (Cananga odorata), vetiver grass (Vetiveria zizanioides), and Elemi, which is produced from the resin of the Pili tree (Canarium luzonicum). Also known as the “wood of the gods,” agarwood is reputedly the most expensive forest product in the world. A kilogram of premium quality agarwood, sought for its fragrant resinous heartwood from the Aquilaria tree that naturally grows in the wild in the Philippines, can fetch up to P5 million. Grown in plantations, each Aquilaria tree can produce from four to six kilos of agarwood that can fetch from a range of P75,000 to P100,000 per kilogram.
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INTERVIEWED by the BusinessMirror, Lorenzo Jr., chairman of Iba Botanicals, said the company is targeting to plant within the year at least 60 hectares of Aquilaria malaccensis, a species that naturally occurs in Bangladesh, Bhutan, India, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand and
the Philippines. This early, Iba Botanicals has already sold seedlings to some 1,000 buyers. Iba Botanicals sells seedlings at P1,000 each, which are about 25 centimeters to 30 centimeters tall, but the price goes down depending on the quantity being purchased. Easily, Lorenzo and Mead
said that with the incorporation of the Agarwood Association of the Philippines, the areas planted to Aquilaria malaccensis can reach 1,000 hectares in a couple of years, noting that the Philippines is known to produce premiumquality agarwood. Because of the huge demand for agarwood, Aquilaria malaccensis
is threatened with extinction due to habitat loss, and in the case of the Philippines, due to the absence of a legal source, and rampant tree poaching to harvest agarwood in the wild. The trading of Aquilaria malaccensis is strictly regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) and it requires special permits to import or export CITES-listed species. The DENR-BMB also strictly prohibits the harvesting of the species, its seeds, or seedlings from the wild as it is already on the endangered list and will stop at nothing to apprehend those in the illegal trade of agarwood-producing trees and their most expensive products.
Sure buyers
IBA Botanicals has been working with some of the largest buyers of essential oils and these are Continued on A2
THIS Sunday (May 15) sees the holding of one of Biñan City’s most colorful festivals, the Puto Latik Festival. Seen here is file photo of the Puto Latik Festival 2019 Grand Opening Ceremony held at the heart of the town plaza. For more of the Puto Latik Festival, please see pages A6-A7. CONTRIBUTED PHOTO
n JAPAN 0.4079 n UK 63.9057 n HK 6.6735 n CHINA 7.7183 n SINGAPORE 37.5231 n AUSTRALIA 35.9001 n EU 54.3924 n SAUDI ARABIA 13.9663
Source: BSP (May 13, 2022)